In the blog below, you’ll note how the Information Commissioner’s Office is taking a hard-line approach to PECR. If an organisation uses electronic channels to re-permission its database in time for GDPR enforcement in May 2018, it must comply with PECR. Moneysupermarket.com is the latest in a series of big names to fall foul of email regulations.

You’ll also see an analysis of ransomware profitability, which helps explain its continued growth; the final story summarises Facebook’s views on data security.

The ICO issues fines amounting to £160,000 for Provident Personal Credit and Moneysupermarket.com

The Information Commissioner’s Office has issued civil monetary penalties of £80,000 each for Provident Personal Credit, a Bradford-based sub-prime lender, and Moneysupermarket.com, a leading brand comparison site, on the 17th and 20th of July respectively. In both cases the fine was for breaching the Privacy and Electronic Communications Regulation (PECR).

Unsolicited texts annoy prospects and customers

Quick-loan credit firm Provident Personal Credit, a brand operated by Provident Financial, was fined £80,000 for sending out nearly 1 million nuisance text messages in the space of 6 months.

The company employed a third party affiliate to send the unsolicited marketing for loans provided by a sister brand, Satsuma Loans.

Text messages may not be sent if the recipients have not consented to receiving marketing texts, so this activity was in breach of PECR.

Beware of sending “service” emails which are actually “marketing” emails

A few days later, the price and brand comparison website Moneysupermarket.com was fined for sending 7.1 million emails over 10 days updating customers with its Terms and Conditions, despite these customers having explicitly opted-out of receiving this type of email. This offence is almost identical to the breaches for which Morrison’s, Honda and Flybe were fined last month.

One of the key problems was the section “Preference Centre Update” which said: “We hold an e-mail address for you which means we could be sending you personalised news, products and promotions. You’ve told us in the past you prefer not to receive these. If you’d like to reconsider, simply click the following link to start receiving our e-mails.”

In a previous blog, we explained the ambiguity between ‘service’ emails and ‘marketing’ emails when implicitly emailing or communicating marketing content to individuals who have opted out. This is in breach of regulations (which will only get stricter after the General Data Protection Legislation comes into force in May 2018).

Google research leads to fears of proliferating ransomware

Ransomware encrypts and scrambles victims’ computerised files. The files will not be decrypted until after a ransom is paid

Research carried out by Elie Bursztein, Kylie McRoberts and Luca Invernizzi from Google has found that cyber-thieves have made $25m (£19m) in the last two years through the use of ransomware. The research suggests that this type of malware regularly makes more than $1m (£761,500) for its creators.

The two strains of ransomware that have seen the most success are ‘Locky’ and ‘Cerber,’ which have collected $7.8m (£5.9m) and $6.9m (£5.2) respectively. But fears have arisen that due to the profitability of ransomware, new and more expansive variants will emerge amid the increasingly competitive, aggressive and “fast-moving” market for cybercrime weaponry. Mr Burszstein warns that ‘SamSam’ and ‘Spora’ are variants that seem to be gaining traction.

The research collected reports from victims of ransomware but also from an experiment wherein thousands of ‘synthetic’ virtual victims were created online. Mr Bursztein and his colleagues then monitored the network traffic generated by these fake victims to study the movement of money. More than 95% of Bitcoin payments (the preferred currency for ransom payments) were cashed out via Russia’s BTC-e exchange.

The lucrative nature of ransomware has led the Google researchers to conclude that it is “here to stay” and may well proliferate among the many syndicates and crime networks around the world. At a talk at the Black Hat conference, one of the world’s largest information security events, Mr Bursztein warned, “it’s no longer a game reserved for tech-savvy criminals, it’s for almost anyone.”

Facebook’s security boss argues that the industry should change its approach

Hitting the data security balance: user issues vs. tech solutions

At a talk at this year’s Black Hat, Facebook’s Chief Information Security Officer, Alex Stamos, has criticised the information security industry’s over-prioritisation of technology over people.

Advocating a ‘people-centric’ approach to information security, Mr Stamos stated his belief that most security professionals were too focused on complex ‘stunt’ hacks involving large corporations and state organisations, and tended to ignore problems that the majority of technology users face.

He told the attendees, “we have perfected the art of finding problems without fixing real-world issues. We focus too much on complexity, not harm.”

He explained that most Facebook users are not being targeted by spies or nation states, and that their loss of control over their information are from simple causes with simple solutions in which, he claims, the security industry takes no interest. He criticised the industry in general for lacking ‘empathy’ with less tech-savvy people, citing the often-expressed thought by security professionals that there would be fewer breaches and data losses if people were perfect.

He used the example of the widespread criticism from cyber experts that the security team for Facebook subsidiary Whatsapp faced after their decision to use ‘end-to-end’ encryption for the popular messaging app, which was heralded by some as sacrificing security for the sake of usability. Such a sacrifice did not manifest, but Mr Stamos was keen to emphasise the fact that it simply did not occur to security experts that usability was worth pursuing.

Mr Stamos advocated the diversification of the industry by working with less technically minded people who could empathise with the imperfections of tech-users, thus helping to develop more straightforward tools and services that would benefit a larger amount of people.

Facebook has also committed half a million dollars to fund a new project to secure election campaigns from cyber attack. The initiative will be run by the Belfer Center for Science and International Affairs, a think-tank affiliated to Harvard University. This is timely, given the scandals around the cyber- attack on French President Emmanuel Macron’s recent election campaign, and the Russian hack of the Democratic National Committee during the US elections last year.

If you have any data privacy compliance, governance or security concerns which you’d like to discuss with Data Compliant, please email dc@datacompliant.co.uk.

There has been little progress on the draft EU Data Protection Regulation since October. However, the Greek Government took over the Presidency of the Council of the European Union in January 2014, so it is now up to them to progress this legislation.

It is clear that delays are inevitable. Even if the draft is agreed at the Justice and Home Affairs Ministers Council meeting in June, the process then continues with three-party negotiations between Justice and Home Affairs Ministers, the European Commission and the European Parliament.

That process is unlikely to start before the autumn, which would mean that the EU Regulation must be delayed until the end of this year or, more likely, until early 2015. This will delay the law coming into force until the end of 2016 at the earliest, and more likely in 2017.

Three aspects of the new legislation that we have not covered in previous blogs are:

· International Data Transfers: this is a new certification programme which will allow data controllers and processers to apply for certification under The European Data Protection Seal. The certificate will be gained through an audit of data processing activity and certification granted by data protection authorities or accredited third parties. The European Data Protection Seal will enable legitimate transfers of data outside the EEA to recipients who also hold a Seal.

· Data Protection Officers: though still in the draft stage, it is clear that firms will be encouraged or required to appoint data protection officers (DPOs) to ensure an organisation uses, controls and processes data compliantly, nationally and / or globally. There are 500 million citizens within Europe, and currently, a DPO is to be appointed if an organisation processes data on more than 5,000 individuals per annum.

· One Stop Shop continues to be a subject of fierce debate. It is significantly different from current legislation where a business is always subject to the data protection authority in each and every country in which it operates. Under the new One Stop Shop rule, a business which operates in several of the EU Member states would only be subject to the national data protection authority in the country where its Head Office is based.

The debate relates to citizens’ human rights – any data protection complaint made against a company whose head office location is in a different country, will mean that individuals must complain to their own national data protection authority, who will then pass it onto the authority in the relevant country. This complexity will make it difficult for individuals to complain simply and effectively, and argument rages over whether and to what extent this might undermine human rights.

The new date for implementation of a proposed new data protection regulation (DPR) – has been pushed back to “by 2015”, thanks in part to David Cameron’s efforts to protect the interests of UK business. Germany were also supportive though Merkel’s reasoning was slightly different “… to ensure that it can reconcile the existing rights of its citizens.”

23.10.13

On 21st October, 2013, the European Parliament approved its Compromise Text of the proposed EU General Data Protection Regulation. Still a long way from being complete, but the latest from Europe is:

1. Pseudonymous data now has its own definition – currently “personal data that cannot be attributed to a specific data subject without the use of additional information, as long as such additional information is kept separately and subject to technical and organisational measures to ensure non-attribution”.

2. Data Protection Officers: a data controller or processor must appoint a Data Protection Officer when processing personal data relation to over 5,000 data subjects in any consecutive 12-month period. Also where the core processing activities relate to processing location data, children’s data, sensitive personal data, or employees in large scale filing systems.

3. A new concept has been introduced – a European Data Protection Seal -a certification process which allows international data transfers outside the EEA to recipients that also hold a Seal.

4. Right to erasure: the right of data subjects to have their personal data erased if requested is still in the draft (originally “right to be forgotten”). And it’s been strengthened – if the data subject asks a controller to erase his data, the company should also forward the request to others where the data is replicated.

Pulling NSA’s teeth …

The Compromise text had some other changes, including new data protection rules designed to curb America’s spying activities. The intention is to make US secret court orders powerless, and to force companies based outside the EU, like Google and Facebook, to comply with European data protection laws if they operate in Europe. Powers to levy fines running into billions of Euros are being made available to discourage violation of the new rules.

For example, if a third country’s court, tribunal or other administrative authority requests a company (such as a social network or cloud provider) to disclose personal data processed in the EU, that company must notify the data protection authority and obtain their authorisation before any such data transfer can be made.

This step is largely due to Edward Snowden’s information about the American companies, platforms and social networking sites which have been forced to share substantial volumes of EU citizens’ personal online data (from emails and phone calls to video chats and web searches) with the National Security Agency (the US intelligence organisation which collects, monitors, decodes, translates and analyses foreign intelligence and counterintelligence information and data).

The third country issue has been ongoing since January 2012, when the proposed reform to the law was dropped after intense US lobbying. It now seems clear that the EU has had enough, particularly since the revelations that the NSA systems collected – in the single month from February 8th to March 8th – 24.8 billion telephone data and 97.1 billion computer data from across the globe – including UK, Germany and France.

In addition the French are aggrieved that, from December 2012 to January 2013, the NSA were reported to have made 70.3 million recordings of French individuals’ telephone data.

While the NSA is known to collect and store all phone records of all American citizens, their profligate global approach to privacy is clearly unacceptable, and Europe has taken steps to limit their – and other agencies and countries’ – powers.

So now it’s just the simple matter of balancing the need to combat terrorism versus people’s protection of the rights to privacy. Which makes it hardly surprising that this legislation is taking so long with a record-breaking 4,000 amendments so far. It is thought that there is a less than 50% chance of the new regulations going through in the time-frame, though final legislation is still anticipated before the European elections in May 2014.

India’s Draft Privacy Protection Bill

The issue of data protection in India has been generated for a number of reasons – not least, Europe’s concerns given the sheer volume of personal data that is transferred to India. Also, within India itself, there is concern among Indian citizens in relation to the combination of the use of personal identifiers (including biometric data) and extensive individual profiles.

India has been holding a set of roundtable talks since April 2013, with the goal of generating recommendations for a privacy regulatory framework. The last of those talks was held on October 19th between the Center for Internet and Society, the Federation of Indian Chambers of Commerce and Industry, and the Data Security Council of India. Christopher Graham, the UK Information Commissioner, was among the speakers.

We’ll send more updates as they come through – in the meantime, if you have any concerns over how these or the existing DPA and PECR regulations might affect your business, don’t hesitate to contact us.

Earlier this week, Canada, the United States and the United Kingdom issued a joint statement making it clear that they intend to combine their resources to tackle the problem of caller ID spoofing.

Spoofing is a practice conducted by telemarketers who want to conceal their true identity rather than fulfil their legal obligation to identify themselves. Spoofers provide their caller ID with false information which may be a string of digits, or a random or stolen number belonging to a real person or organisation. It is on the increase, and makes it particularly difficult for the authorities to track down those responsible for non-compliant or illegal calls.

The various agencies responsible for enforcing telemarketing and privacy laws announced that they will coordinate their efforts through the international law enforcement network of the London Action Plan and the International Do Not Call Network. If they need the telecoms industry to provide help, they will ask those organisations within their respective countries.

Next steps are exploratory discussions, to be held later this month, to identify options focusing on enforcement, industry compliance and consumer education, technology and regulatory issues with the goal of considering solutions available to stop spoofing and to take action against those responsible.

DATA BREACHES AND FINES

What a monumental blunder …

We heard yesterday that The Ministry of Justice was on the receiving end of the ICO’s judgement, when it received a fine of £140,000 – after details of ALL the prisoners serving time at HMP Cardiff were emailed to three of the inmates’ families.

The fine goes back to 2011 – when, on 2nd August, the recipients received an email from a prison clerk which included a file containing details of the 1,182 inmates – including names, ethnicity, addresses, length of sentence, release dates, and the offence codes. Worse yet – this wasn’t the first time such a breach had occurred. Within the previous four weeks, the same error occurred twice – with details sent to different inmates’ families.

The ICO’s investigation found:

Clear lack of management and supervision at the prison, where the clerk concerned was found to have received limited training and experience, though he was left to work unsupervised.

Audit trails were lacking and the only reason the breach was identified was because one of the recipients reported receipt of the information to the prison.

Problems with the methods used to handle the prisoners’ records, such as the use of unencrypted floppy discs to transfer large volumes of data between networks

The importance of being registered …

If organisations process personal data, with a very few exceptions, they must register with the ICO and spell out the type of information they process. Not doing so is a criminal offence – as Hamed Shabani, sole director of payday loan company First Financial, discovered.

After failing to register, he and his company were prosecuted by the ICO and convicted in the Magistrate’s Court. As Director of the company, he was fined a modest £150 and ordered to pay £1,010.66 towards the costs of prosecution and a £20 victims’ surcharge. In addition, the company itself was fined £500, and also made to pay £1,010.66 towards costs plus a £50 victims’ surcharge.

The total bill of £2,741.32 compares rather unfavourably against the annual £35 notification fee he should have paid. It is also interesting to note that Hamed Shabani tried to remove his name from the company’s registration at Companies House in an attempt to avoid prosecution.

To quote Stephen Eckersley, ICO Head of Enforcement:

“Pay day loans companies hold important information about some of the most financially vulnerable people in the UK. This makes this company and its director’s decision not to face up to their legal responsibilities all the more concerning.

“Businesses must commit to looking after the information of their customers and this begins with making sure that they are registered. We will continue to use our enforcement powers to safeguard people’s information.”

The importance of a strong BYOD policy …

BYOD (Bring your own device) continues to be high on the ICO’s priority list – earlier this month, the Royal Veterinary College breached the DPA when a member of staff lost their camera whose memory card held 6 job applicant passport pictures. Unfortunately, the RVC had not briefed staff on how personal information stored for work should be looked after on personal devices.

Nearly half of all UK employees now use their smartphones, tablets, PCs for work purposes, and the number is growing. As a result, organisations must update their data protection policies to take this into account.

Stephen Eckersley said:

“Organisations must be aware of how people are now storing and using personal information for work and the Royal Veterinary College failed to do this. It is clear that more and more people are now using a personal device, particularly their mobile phones and tablets, for work purposes so its crucial employers are providing guidance and training to staff which covers this use.”

The importance of encryption …

If you are unlucky enough to have a portable device containing personal data stolen, it could cost you much more than simply replacing the device. As the owner of loans company Jala Transport discovered to his cost. He stopped his car at a set of traffic lights, only to have his car boot broken into. A hard drive – containing financial details of his 250 customers – was stolen, along with £3,600 cash.

Though the hard drive was password protected, the data within was not encrypted, and it included customers’ names, dates of birth, the payments made, and the identity documents provided to support the loan application. Because the hard drive had not been encrypted, all those customers were left wide open to the threat of identity theft.

The penalty could have been £70,000, but was reduced to £5,000 to reflect the limited financial resources of the company and the fact that the breach was reported voluntarily.

Stephen Eckersley said of this case:

“We have continued to warn organisations of all sizes that they must encrypt any personal data stored on portable devices, where the loss of the information could cause clear damage and distress to the customers affected…

“The penalty will have a real impact on this business and should act as a warning to all businesses owners that they must take adequate steps to keep customers’ information secure.”

Rates of identity fraud continue to rise

Identity fraud is the most significant threat facing the UK, making security a key issue not only for businesses but also for individuals. Not taking steps to protect personal data just gives fraudsters a license to steal. This is clearly illustrated by the stats – identity fraud now accounts for over half of all committed fraud and is still growing. CIFAS confirmed 114,000 frauds in the first half of 201, of which 52% involved impersonation or fake identity details. An additional 14% of frauds involved account takeover.

All the stories above reflect the importance of being and remaining data compliant and illustrate the penalties that can be imposed by the ICO. If you would like any advice on how to become and remain compliant, just call us for a no-obligation chat.